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Judgment
O R D E R
We have heard Mr. Sukesh Gupta, personal guarantor / petitioner party herein, and Sri Dishit Bhattacharjee, Learned Counsel for the Financial Creditor.
This application is filed after the matter is posted for pronouncement of orders, to differ pronouncement of order in this matter.
A perusal of the affidavit filed in support of the Petition only states that the petitioner expressed his inclination to settle the matter with the Financial Creditor and also discussed the details of source of funds, according to the petitioner there is a possibility of settlement, hence he prays for deferring the pronouncement of order today in the Company petition.
However, the Learned Counsel for the Financial Creditor submits that as per the instructions he received from Financial Creditor, no such discussions for settlement have happened and the prayed that the order may be pronounced today as listed.
Having carefully perused the petition and as no settlement has been arrived at, on a mere unilateral representation that the petitioner intent to settle the matter, pronouncement of the order cannot be deferred. Further we find from the record that sufficient opportunity was given to the petitioner. Hence, this application is liable to be dismissed. Accordingly, this application is dismissed
Order in Company Petition CP (IB) No. 145/2022 is pronounced. Recorded vide separate sheets. In the result, this petition is allowed and Insolvency Resolution Process is ordered against Personal Guarantor.
PER: BENCH
This instant petition is filed by Financial Creditor under Section 95(1) of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 (hereinafter referred to as “Personal Guarantors Insolvency Rules, 2019), seeking an order for initiation of the Insolvency Resolution Process (“IR Process”) against Sukesh Gupta, who is the Personal Guarantor of M/s. MBS Impex Private Limited (hereinafter referred to as “Corporate Debtor”).
It is averred that corporate debtor had availed working capital facilities in the form of overdraft and SBLC/BG under different loan documents from ICICI Bank. In order to secure the repayment of the financial assistance Shri Sukesh Gupta, stood as guarantor and had executed guarantee agreements dated 09.02.2011. Thus the financial creditor exercised its rights and remedies available and issued notices to the corporate debtor and guarantors for recalling the outstanding amounts.
It is averred that neither corporate debtor nor personal guarantor paid the outstanding amount, and thus the financial creditor and its Associated Banks filed the Original Applications(O.A) before the Hon’ble Debt Recovery Tribunal.
It is averred that DRT has passed decree and issued recovery certificate by directing the corporate debtor and guarantors to pay the amount in 30 days. The same has been defaulted.
It is submitted that pursuant to the Central Government framing of I&B (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantor to Corporate Debtor)Rules, 2019 which has came into force from 01.12.2019. Thus financial creditor issued demand notice on 17.12.2021 to personal guarantor, despite of receipt of demand notice, personal guarantor has not come forward to pay the outstanding amounts. Thus the financial creditor has filed the present Application to initiate Insolvency Resolution Process against the personal guarantor.
It is averred that on 26.08.2022, ICICI Bank Limited has unconditionally and irrevocably assigned and transferred all the financial assistance granted by it in favour of financial creditor herein, together with all the underlying security interests, guarantees, etc and Original Applicant right, interest and title thereto created to secure, guarantees issued in respect of, the repayment of which ICICI Bank Limited was entitled to vide Assignment Agreement dated 26.08.2022 between ICICI Bank Limited and Rare Asset Reconstruction Limited.
Further submitted that personal guarantor has not made payments thus the financial creditor has filed the present Application for initiation of Insolvency Resolution process against the personal guarantor.
It is to be further noted that the outstanding debt as on 29.11.2021 is Rs.
49,95,98,391.27/- (Rupees Forty Nine Crore Ninety Five Lakh Ninety Eight Thousand Three Hundred Ninety One and Paisa Twenty Seven only). The Petitioner Bank attached the following documents to prove the existence of debt and amount in default: - Credit Agreement letter dated December 31st,2010.
Master facility agreement dated February 9th , 2011.
Deed of Hypothecation dated February 9th, 2011.
Memorandum of Deposit of the title deeds dated February 15th, 2011. Personal Guarantee Agreement of Mr.Prakash Chand Gupta, Mr.Sukesh Gupta, Mrs.Neetu Gupta and Mr.Anurag Gupta dated February 9th 2011.
Credit Arrangement Letter dated March 29th, 2012.
Note of Amendment and letter of Acknowledgement of debt dated April 20th, 2012. Credit Arrangement letter dated August 14th, 2012. Supplemental and amendatory agreement dated August 23rd, 2012. Credit Arrangement letter dated April 3rd, 2013. Note of Amendment and letter of Acknowledgment of Debt dated April 15th, 2013. Loan recall notice dated July, 8th 2014. Recovery certificate issued by DRT, Hyderabad on September 26th, 2016 and demand notice dated October 3rd, 2016. CRILC Report. Statement of account of Corporate debtor. Demand Notice dated 17.12.2021 and postal receipts along with acknowledgment cards.
Counter filed by the Respondent:
1st Respondent had objected the present Application on the following grounds:
Assets of the corporate debtor are more valuable that the alleged dues claimed by the financial creditor Limitation.
It is averred that the limitation in filing the petition under Section 95 of the IBC is three years. As per the records the Loan Recall Notice was on 08.07.2014 while the OTS was entered after three years i.e on 05.11.2019. Thus the claim against the guarantors by the financial creditor is time barred.
Further it is averred that the financial creditor needs to issue a notice of demand. The earlier notice issued by ICICI was hit by limitation. It is also averred that though financial creditor have all the assets in their possession there is no efforts made by them to proceed against the said assets. It is averred that the particulars provided in Part III with respect to the total outstanding is not provided as per the provisions of the Code. The entire amount that are being recorded in Part III is disputed and the same needs to be substantiated with documentary proof.
It is averred that pursuant to the order dated 29.04.2022, it appears that the IRP has filed a report that was recorded in the proceedings by this Hon’ble Tribunal on 30.05.2022. It is submitted that the report filed by the IRP is without jurisdiction and the fact that no notice was issued to the guarantor, the report is defective as the same is filed against the principles of natural justice.
It is further submitted that the Hon’ble Supreme Court held that IRP appointed in Section 95 of IBC be restrained from submitting the Statutory Report before the Adjudicating Authority without following the principles of Natural Justice. Thus prayed the Hon’ble Tribunal to dismiss the petition filed by the Financial Creditor and pass such other orders this Tribunal may deem fit and proper.
Rejoinder filed the financial creditor:
It is submitted that the application is not barred by the limitation as the cause of action firstly arose and when the Financial Credit Facilities were sanctioned in favour of the Corporate debtor and financial creditor on 31.12.2010 and 09.02.2011. Subsequently, the cause of action continued till 2018. Further due to non-payment of the total amount as per the said recovery certificate the corporate debtor along with personal guarantor approached the financial creditor several time proposing OTS and withdrawal of CP(IB) No.407/7/HDB/2019 dated 05.11.2019, 22.11.2.19 and 12.12.2019 which established the acknowledgement of debt. During the process the final action arose when the financial creditor issued demand notice on 17.12.2021. Therefore, the Application CP(IB) No.145/95/HBD/2022 is not barred by limitation and the limitation period shall continue till December, 2014.
It is averred that the allegation made by the personal guarantor that notice had not receiv 0ed is not true, as the personal notice dated 29.04.2022 was acknowledged and received by the personal guarantor herein on 02.05.2022. Thus the petition is well within the limitation and prayed the Tribunal to consider the Application.
On presentation of this instant petition, this Adjudicating Authority on 29.04.2022 granted interim-moratorium and has appointed Shri. Vamsi Kambhammettu as Resolution Professional, directing him to file his report within 10 days from the date of his appointment, in terms of the Section 99 of the Code, 2016. The Resolution Professional has filed his report on 18.05.2022, recommending the admission of the Petition under Section 95 of the Code, 2016. The Resolution Professional in his report stated that the he has examined the Application filed under Section 95 of the IBC, 2016 by the financial creditor and its clear that the grounds for admission of this instant Petition are that the Personal Guarantor stood as a guarantor to the loans availed by the Corporate Debtor and Corporate Debtor failed to repay the same and since the Personal Guarantor has admitted the debt and non-existence of dispute.
In the light of the aforesaid factual matrix the point arises for our consideration is: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under Section 100 of the Insolvency and Bankruptcy Code, 2016?
We have heard the Learned Counsel Shri.Dishit Bhattacharjee, for the Petitioner, Learned Counsel Shri Herur Rajesh Kumar, for respondent/personal guarantor and Learned Resolution Professional Shri. Vamsi Kambhammettu, and perused the record.
At the outset it may be stated that the Petitioner has initiated Corporate Insolvency Resolution Process against the Corporate Debtor i.e., M/s. MBS Impex Private Limited vide CP (IB) No.407/7/HDB/2019 under Section 7 of the Code, 2016 which was admitted by this Adjudicating Authority vide order dated 13.11.2019 and the instant petition is initiated against the Personal Guarantor of the Corporate Debtor.
The Resolution Professional has filed his report on 18.05.2022, recommending the admission of the Petition under Section 95 of the Code, 2016. The Resolution Professional in his report its clear that the grounds for admission of this instant Petition are that the Personal Guarantor stood as a guarantor to the loans availed by the Corporate Debtor and Corporate Debtor failed to repay the same and since the Personal Guarantor has admitted the debt and non-existence of dispute.
Hence, the instant Company Petition vide CP (IB) No. 145/95/HDB/2022 filed under the provisions of Section 95 of Code, 2016 is hereby admitted under the provisions of Section 100 of the Code, 2016 and Insolvency Resolution Process is initiated against Shri Sukesh Gupta, the Personal Guarantor, and moratorium is declared in relation to all debts, which begins from the date of admission of the instant petition and shall cease to have effect at the end of the period of 180 days, as provided under Section 101 of the Code, 2016.
During the moratorium period-
Any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed;
The Creditors shall not initiate any legal action or legal proceedings in respect of any debt; and
The debtor shall not transfer, alienate, encumber or dispose of any of her assets or her legal rights or beneficial interest therein;
The provisions of this Section shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
The Petitioner herein, has proposed the name of Shri. Vamsi Kambhammettu, (IBBI/IPA-001/IP-P00664/2017-2018/11141) Insolvency Professional to act as Resolution Professional, who has given his consent dated 23.03.2022 in Form-A. Hence, this Adjudicating Authority appoints: Shri. Vamsi Kambhammettu, Registration No. IBBI/IPA-001/IP-P00664/2017-2018/11141, email id: casrivamsi@gmail.com Address: Survey No.A85, DX4, Level 2, Road No.11, Film Nagar, Jubilee Hills, Hyderabad-500 033, TS India..
The Resolution Professional is directed to cause public notice published on behalf of the Adjudicating Authority within 7 days from the date of uploading of this order on the website of NCLT, Hyderabad, inviting the claims from all creditors, who shall register their claims as provided under Section 103 of the Code within 21 days of such issuance. The notice shall contain the necessary information as provided under Section 102(2) of the Code. The publication of notice shall be made in newspapers, one in English and other in vernacular (Telugu) which have wide circulation in the State where the Personal Guarantor and Corporate Debtor resides. The Resolution Professional shall furnish two spare copies of the notice to the Registry. One shall be placed on our website by the Registry and the other shall be affixed in the premises of this Adjudicating Authority.
The Resolution Professional in exercise of the powers conferred under the Section 104 shall prepare a list of creditors within 30 days from the date of the notice. The Personal Guarantor shall prepare, in consultation with the Resolution professional, a repayment plan containing a proposal to the creditors for restructuring of her debts or affairs as provided under Section 105 which shall include the provisions for payment of fee to the Resolution Professional. The Resolution Professional shall submit the repayment plan along with his report on the plan to this Adjudicating Authority within a period of 21 days from the last date of submission of claims as provided under Section 106.
In case the Resolution Professional recommends that a meeting of the creditors is not required to be summoned, he shall record the reasons thereof. If the Resolution Professional is of the opinion that the meeting of creditors should be summoned, he shall specify the details as provided under Section 106(3). The date of meeting shall not be less that fourteen days or more than 28 days from the date of submission of the Report under Sub-section (1) of Section 106 of the Code, for which atleast 14 days’ notice to the creditors (as per the list prepared) shall be issued by all modes. Such notice must contain the details as provided under the provisions of Section 107 of the Code.
The meeting of the creditors shall be conducted in accordance with the provisions Sections 109, 110 and 111. The Resolution Professional shall prepare a report of the meeting of the creditors on repayment plan with all details as provided under Section 112 and submit the same to the Authority, copies of which shall be provided to the guarantor and the creditors. It is made clear that the Resolution Professional shall perform his functions and duties in compliance with the Code of Conduct provided under Section 208 of the Code.
The Petitioner is directed to communicate this order to the Resolution Professional appointed in the instant Company Petition immediately.